Green finance boosts the sustainability of farmers and households in the Philippines

©Maxence Soulet

ADA supported three microfinance institutions (MFIs) in rolling out green, inclusive financial products for farmers and disadvantaged urban households in collaboration with the Microfinance Council of the Philippines, Inc. (MCPI), the national umbrella organisation of financial service providers. 

The aim of the project was to provide farmers with access to renewable energy and to enable them to implement sustainable farming practices which will support their adaptation to climate change. While green loans enabled the farmers to build greenhouses as well as to install drip irrigation systems and solar-powered water pumps, they were also taught how to produce mulch as an organic fertiliser, manage water resources and transition to organic farming. These green loans were also used for aqua farming, for example for installing solar-powered lights in fish cages and aerators in ponds.

In addition to farmers, the project also targeted vulnerable urban households. They were supported in using energy more efficiently thanks to green loans for efficient appliances, access to solar energy, improved insulation, ventilation and more natural light in their houses which reduced the need for electric lighting and air conditioning. These housing loans proved very popular, over 1300 loans had been disbursed to a mainly female client base by the end of the project.

Green loans complemented by education and training

To raise awareness of the effects of climate change and the need for adaptation, the participating MFIs offered low-income clients training sessions during which they learned how to benefit from financial products and to choose appropriate climate change adaptation solutions.

As part of the project, selected farmers were assisted in setting up demonstration farms by implementing sustainable agricultural practices with tailored coaching by agronomists specialised in climate-smart solutions. These farmers were also provided with operational guides and business plans. In addition, both the farmers and the MFIs benefited from market mapping that facilitated the sale of their organic produce. 

For example, Mario and Melanie Ambal took out a loan at the MFI Bangko Kabayan to switch to organic farming. The sustainable farming methods they learned at the accompanying training enabled them to increase their eggplant yield without the use of costly pesticides. They now intend to apply the organic methods to other crops such as string beans, bitter gourd and chili. 

These demonstration farms now serve as examples to other farmers interested in taking out green loans with the MFIs.

The project was supported by the Luxembourgish Ministry of the Environment, Climate and Biodiversity.

Watch a video on the project: 

Watch a video on Mario and Melanie Ambal’s switch to organic farming: